Would this help GM, Chrysler (& Ford)

[Midpack]

I am not convinced how true it is, but many of the Detroit 3's detractors say it's their own fault for not offering good small, fuel-efficient cars. For the sake of discussion, let's assume there's some truth to it.

If that's so, why shouldn't our 535 new automotive engineers in Congress pass legislation immediately to waive all safety, emissions and other automobile standards to allow GM, Chrysler & Ford to import better small cars they are already making and selling in Europe or elsewhere? It's not as if they're are no standards in Europe or elsewhere, but they are different than US standards (from what I can gather including but not limited to emissions, bumpers, headlights, taillights). Several of the D3 are already working on modifying European spec cars for sale in the US, but evidently it's a substantial task to comply. My case in point is the new Ford Fiesta which is evidently quite a car already on sale in Europe, but won't be available here for another 2 years! Ford & GM (if not Chrysler) reportedly both have much better small cars available outside the US. While this doesn't help American jobs in the short term, would it not:
a) provide additional revenue to help these companies survive while they adjust to current & future conditions, and
b) give them time to see that Americans will indeed buy better small cars from GM, Ford & Chrysler (before spending 2 years and tons of $ retooling only to find out Americans still want tanks)?

Again it doesn't help American workers though, so I would suggest they be allowed to import Euro spec cars tomorrow on the condition they have 2 or 3 years to bring those models into compliance with US standards. If they don't bring the cars into compliance --- they had a chance to get back in the game and they didn't, so they should be allowed to fail. What's the downside vs more bailouts or a tougher bankruptcy?

 

[donheff]

If they had built small energy efficient cars only a handful of people in America would have bought them. We wanted brawny SUVs and pickup trucks. What we should have done is institute a serious gas tax in the 70s. We would be energy independent today and would all be driving green cars.

 

[FinanceDude]

If they had built small energy efficient cars only a handful of people in America would have bought them. We wanted brawny SUVs and pickup trucks. What we should have done is institute a serious gas tax in the 70s. We would be energy independent today and would all be driving green cars.

Do we really want to model Europe that much?

The fact that you can got to Europe and buy large Mercedes sedans with fuel efficient diesels that get 40 mpg is more the issue. The EPA standards are much too high in many ways, so a lot of those cars almost need to be reengineered to be sold here.......

The US govt will MAKE GM and Chrysler make a bunch of green cars NOONE will buy, sealing their fate.

One of the BEST-SELLING cars in IRAQ are the Hummers. I guess the Iraqis aren't feeling the need to be green.......

 

[HFWR]

No one wanted their cars before. Why should now be any different?

 

[FinanceDude]

No one wanted their cars before. Why should now be any different?

Good point........all of the Big Three carmakers have made so many dumb mistakes you could fill the Titanic with them.........

I used to hear scary stories all the time from a client I had (died) that worked at GM from 1960-1995. He worked his way up to a senior management positions and was shocked at the high-level discussions that were going on, including the long-held belief by most at GM that the average American was "Dumb" and "would buy our cars no matter what"...........

The loss of market share for GM is directly correlated with the increase of market share for Honda, Toyota, and Nissan. I guess the American buyer isn't as "Dumb" as they thought.........

 

[ziggy29]

I used to hear scary stories all the time from a client I had (died) that worked at GM from 1960-1995. He worked his way up to a senior management positions and was shocked at the high-level discussions that were going on, including the long-held belief by most at GM that the average American was "Dumb" and "would buy our cars no matter what"...........

The loss of market share for GM is directly correlated with the increase of market share for Honda, Toyota, and Nissan. I guess the American buyer isn't as "Dumb" as they thought.........

This seems to be a counterexample to the old saying that "no one ever went broke underestimating the stupidity of the American people"...

 

[Zathras]

It isn't an all or nothing proposition.
They don't need to build ONLY fuel efficient vehicles. They just need to be capable of producing them at a profit.
I honestly don't know why some of the more fuel efficient European cars are not brought to the US market. Is it only because of US regulations? Or is there some other reason?
The Jette TDI is making it over here in small numbers, why not more and why not Ford or GM cars?
The biggest help to GM would be if they found a way to make a profit on small cars. If they can't it won't matter what we do or how much money we give them.

 

[Texas Proud]

I am not convinced how true it is, but many of the Detroit 3's detractors say it's their own fault for not offering good small, fuel-efficient cars. For the sake of discussion, let's assume there's some truth to it. ...

I was pointed out by HFWR... it is NOT that they did not have small fuel efficient cars (of course they didn't)... but just crappy cars in general...

When it was time to sell small efficient cars, they did not have any to sell which further hurt them...

So again, if I did not want to buy a GM on my last car purchase (don't know what size it is now, but Acura TL, size of an Accord), then why would you think I would want to buy a small GM car for my next purchase? Even if imported from Europe?

 

[FinanceDude]

It isn't an all or nothing proposition.
They don't need to build ONLY fuel efficient vehicles. They just need to be capable of producing them at a profit.

That's the big problem. GM has LOST money on literally every compact and mid-sized car they have sold for a couple decades........

I honestly don't know why some of the more fuel efficient European cars are not brought to the US market. Is it only because of US regulations? Or is there some other reason?

Three words for you: E P A

The biggest help to GM would be if they found a way to make a profit on small cars. If they can't it won't matter what we do or how much money we give them.

Gm makes a profit on the Malibu, according to them. That is quite interesting, since GM seemingly could never make profits on their cars for many years.

Cavaliers had a $2500 rebate on them for about 8 years........

 

[FinanceDude]

I was pointed out by HFWR... it is NOT that they did not have small fuel efficient cars (of course they didn't)... but just crappy cars in general...

QC has been almost non-existent on GM cars for amny years. The only ones that didn't break all the time were/are the join ventures with Toyota (Geo Prism and Pontiac Vibe, etc)

When it was time to sell small efficient cars, they did not have any to sell which further hurt them...

The only way to pay legacy costs was to push trucks and SUV's.......

So again, if I did not want to buy a GM on my last car purchase (don't know what size it is now, but Acura TL, size of an Accord), then why would you think I would want to buy a small GM car for my next purchase? Even if imported from Europe?

I have an Accord so I am biased, but you DO have some choices to look at:

Mercury Milan and Ford Fusion ( basically Mazda platform cars)
Chevy Malibu (nice car, reliability has been very good)
Hyundai Sonata (not a domestic, but coming on strong)
Toyota Camry (ugly to me, but they sell a ton)
Chrsyler (sorry, ALL of their sedans are ugly)

Acura is a premium car brand. The Cadillac CTS is an underappreciated car, quite nice actually. The 2010 Buick La Crosse looks awesome, Buick recently beat Lexus in initial quality........

I personally am watching how the Hyundai Genesis does. I REALLY like that car.....

 

[samclem]

European crash standards are considerably different from the US--in a nutshell, the European tests assume the occupants are wearing seat belts, in the US tests, the cars must provide significant protection to unrestrained occupants. This makes a big difference. In fact, some of the design changes necessitated by the US testing (e.g more violent airbag inflation) actually made restrained occupants LESS safe for years.

A main reason the US automakers have lost money for years on small cars and a reason the cars have been so crappy is the "two fleets rule" imposed by Congress as part of the CAFE standards and largely at the behest of the unions. Was almost overturned with legislation two years ago, but it was not to be. Guess why and guess who helped scuttle the needed reform (link) :

...a peculiar feature of Congress's 1975 fuel economy law. Known as the "two fleets" rule, it effectively forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car. The rule has no fuel-economy function. Its only purpose is to shield the UAW monopoly inside each Detroit auto maker from global labor competition.
You wouldn't have noticed, but a legislative accident two years ago almost stripped away the two fleets rule. A couple of Republican senators from the South took the lead in crafting the Senate's new fuel economy bill, and built it to please Nissan, which had railed against two fleets for its own reasons.
In the final bill, to no one's surprise, two fleets was quietly restored by Rep. John Dingell and Illinois Sen. Obama (among others) as a political favor to the United Auto Workers.

It won't be hard to locate many of the folks responsible for the wreck of the US auto industry. Some are still in Detroit, some are now in high offices in DC, molding the new industry in ways that meet their goals. I wonder who will force them to resign?

 

[FinanceDude]

European crash standards are considerably different from the US--in a nutshell, the European tests assume the occupants are wearing seat belts, in the US tests, the cars must provide significant protection to unrestrained occupants. This makes a big difference. In fact, some of the design changes necessitated by the US testing (e.g more violent airbag inflation) actually made restrained occupants LESS safe for years.

That's pretty dumb...........

A main reason the US automakers have lost money for years on small cars and a reason the cars have been so crappy is the "two fleets rule" imposed by Congress as part of the CAFE standards and largely at the behest of the unions. Was almost overturned with legislation two years ago, but it was not to be. Guess why and guess who helped scuttle the needed reform (link) :

That's even dumber.........

 

[jIMOh]

No one wanted their cars before. Why should now be any different?

what he (she?) said.

It's not just about a better car.
It is about trust, consumer trust (in the brand) and business model/ business practices.

The big 3 were making most of their money on financing and not on the sale of the car itself. This in and of itself is a bigger issue than which car is sold.

Having worked for Ford and in the supplier network for every one of the 10 largest automakers in the world, I can tell you it takes Ford-GM-Chrysler 5 years to go from a new concept to the car coming off the assembly line. It takes Toyota and Honda less than 3 years.

Until the culture changes, the actual car being sold is not going to improve the situation or circumstance.

 

[lets-retire]

If you watched the quality ranking for the last several years, the D3 have been in the mix with the Japanese cars (Toyota, Nissan, and Honda Mazda was owned by Ford). It is a problem with perception. Many people remember the 70's-90's and still think that is the way the D3 make their cars. They don't and haven't for several years. Really if you look at the top ten in those ranking the difference between number 1 and 10 is so small (normally only a few more complaints) as to be irrelevant.

 

[Zathras]

Yes, they have come a long way in initial quality.
The problem is, it isn't a pack of gum people are buying. It is a 10-20 thousand dollar purchase (or more). If someone has a bad experience with the car OR the dealer they are less likely to take a chance on another one without a LOT of evidence they have changed for the better.
And that will take time.

 

[FinanceDude]

If you watched the quality ranking for the last several years, the D3 have been in the mix with the Japanese cars (Toyota, Nissan, and Honda Mazda was owned by Ford). It is a problem with perception. Many people remember the 70's-90's and still think that is the way the D3 make their cars. They don't and haven't for several years. Really if you look at the top ten in those ranking the difference between number 1 and 10 is so small (normally only a few more complaints) as to be irrelevant.

I don't like the initial qaulity studies because of course most cars will get through their first 2 -3 years without big problems. However, reliability HAS been a problem for the Big 3, particuarly at that crucial 4-7 year timeframe.

As I have said, when I see great FIVE YEAR numbers on models like the Fusion and Malibu, I may change my perception. I DON'T EXPECT a brand new car to have a lot of problems.........

 

[ziggy29]

I don't like the initial qaulity studies because of course most cars will get through their first 2 -3 years without big problems. However, reliability HAS been a problem for the Big 3, particuarly at that crucial 4-7 year timeframe.

Cars don't break down until three years or 36,000 miles have passed.

It'll be interesting to see if the new "layoff protection plans" Ford and GM are announcing for new financed purchases help drive sales. Apparently, Hyundai's sales haven't cratered along with the other automakers (foreign and domestic) since they adopted such a plan, and perhaps the execs are sensing that it may boost confidence enough to buy a new car.

(Still, it's yet another program that encourages credit and debt. If someone paid cash for the car and got laid off tomorrow, they're still screwed.)

 

[Texas Proud]

Yes, they have come a long way in initial quality.
The problem is, it isn't a pack of gum people are buying. It is a 10-20 thousand dollar purchase (or more). If someone has a bad experience with the car OR the dealer they are less likely to take a chance on another one without a LOT of evidence they have changed for the better.
And that will take time.

Quite true... I had an '85 Cougar that was a piece of crap... but kept it for 10 years... I swore I would not buy another Ford .... however, I did buy my BILs '04 Explorer after he died for the wife... she loves it and so far it has been good except for a stripped oil plug nut...

My '95 Monte Carlo has been mostly good, but from what I hear from mechanics I got VERY lucky as I have the 3.4 liter engine... they tell me most are really bad... closing in on 100,000 miles, so maybe I will be getting something else soon... but I also don't see buying a GM... why take the gamble...

I have to admit that the Hyundai is looking better and better... cheap and realiable even in the long run...

 

[unclemick]

Hmmm - I was lusting for another Chevy Silverado big V8 pickup with big wide tires but the current SO says the current 2006 Chevy Equinox has a few more miles in it.

The heck with Congress and MPG laws et al - I know which vote really counts.

heh heh heh - Now maybe a big 4-6 MPG RV - there's a thought. .

 

[JOHNNIE36]

Good point........all of the Big Three carmakers have made so many dumb mistakes you could fill the Titanic with them.........

I used to hear scary stories all the time from a client I had (died) that worked at GM from 1960-1995. He worked his way up to a senior management positions and was shocked at the high-level discussions that were going on, including the long-held belief by most at GM that the average American was "Dumb" and "would buy our cars no matter what"...........

The loss of market share for GM is directly correlated with the increase of market share for Honda, Toyota, and Nissan. I guess the American buyer isn't as "Dumb" as they thought.........

That quote is a bunch of crap and don't believe it for a minute. For the last four years of my career at the General Motors Tech Center in Detroit, I was in monthly meetings with various Vehicle Chief Engineers and Division Sales Chiefs and all emphasis was always on providing a better vehicle than the competition. Guess the only guy that had it made was Dave McClellan, Vehicle Chief Engineer for Corvette. He had a blank check book and all the "competition" was trying to copy him. No one ever thought it was a given that the public would buy what was produced. I'll give you this, quality on fit and finish was not a top priority until the early 1980's. That's when quality came to the forefront and the Japenese started to made us look bad. I would say that it took us fifteen years to catch up to them and I can't blame the public for switching to the foreign manufacturers. Now we are in the position of having to win back those buyers that left us and that is tough. We are there but it's really hard to convince the American public how good the American cars are. Someone buys a Toyota Camry and it gives them top notch service. Why change to something else. It's a tough road back. Only time will fix it. Maybe the American car will go the way of American made shoes. I don't think any shoes are produced here anymore. Maybe SAS.

 

[haha]

That quote is a bunch of crap and don't believe it for a minute. For the last four years of my career at the General Motors Tech Center in Detroit, I was in monthly meetings with various Vehicle Chief Engineers and Division Sales Chiefs and all emphasis was always on providing a better vehicle than the competition. Guess the only guy that had it made was Dave McClellan, Vehicle Chief Engineer for Corvette. He had a blank check book and all the "competition" was trying to copy him. No one ever thought it was a given that the public would buy what was produced. I'll give you this, quality on fit and finish was not a top priority until the early 1980's. That's when quality came to the forefront and the Japenese started to made us look bad. I would say that it took us fifteen years to catch up to them and I can't blame the public for switching to the foreign manufacturers. Now we are in the position of having to win back those buyers that left us and that is tough. We are there but it's really hard to convince the American public how good the American cars are. Someone buys a Toyota Camry and it gives them top notch service. Why change to something else. It's a tough road back. Only time will fix it. Maybe the American car will go the way of American made shoes. I don't think any shoes are produced here anymore. Maybe SAS.

D-3 are not dumb, though certain executives may have been very short-sighted. But they know the nut of non-car costs that they have to cover on every vehicle, and they know that the UAW and their political protectors will not let that change.

Hard to bury several $K in a $17,000 car. So they did the only thing they could do, which IMO was quite rational. Build and market bigger more expensive vehicles that could carry their non-production legacy and labor costs and pray for cheap oil.

If I weren't already so disillusioned, it would turn my stomach to hear these cahracters in DC posture about how the car companies and their managements have let America down.

Tell, Mr. and Ms. political genius, why can Ford and GM build very successful, profitable cars outside the US?

ha

 

[ziggy29]

Tell, Mr. and Ms. political genius, why can Ford and GM build very successful, profitable cars outside the US?

At least two reasons immediately come to mind: legacy retirement benefits and the fact that in foreign countries, GM and Ford aren't as heavily burdened with employee health insurance costs.

 

[JOHNNIE36]

At least two reasons immediately come to mind: legacy retirement benefits and the fact that in foreign countries, GM and Ford aren't as heavily burdened with employee health insurance costs.

And government mandates such as 5mph impact bumpers, air bags, bumper heights, emission standards, CAFE requirements, etc. One I was personally involved in was the CHIMSL (center high mounted stop lamp). Can't remember how this became a government mandate but all of a sudden we had to engineer this into every car. You can't believe how much time and effort this took and the dollars required to meet the goals and deadlines all set up by our government. I am not bitching about the requirements, but we had to jump through hoops to make this happen within the time limits allowed. It just makes me sick to think of how much stuff we had to work around that the foreign mfg got a free ride. Sorry, I'll stop!

 

[kumquat]

It is a problem with perception. Many people remember the 70's-90's and still think that is the way the D3 make their cars.

\Maybe they should think back to the 60's and early seventies. Early Honda Civics were CRAP. Trouble is, Honda saw it and fixed it sooner.

 

[ERD50]

Tell, Mr. and Ms. political genius, why can Ford and GM build very successful, profitable cars outside the US?

ha

At least two reasons immediately come to mind: legacy retirement benefits and the fact that in foreign countries, GM and Ford aren't as heavily burdened with employee health insurance costs.

Hmmm, now wasn't Wagoner the CEO over BOTH the GM that makes money outside the US, and the GM that looses money in the US? If he was so bad, how can that be?

Seems like the differences are the US govt and the UAW.

-ERD50